Patel Bachubhai Ramjibhai v. Parsottambhai P. Rami
2016-06-30
B.N.KARIA
body2016
DigiLaw.ai
JUDGMENT : B.N. Karia, J. 1. By means of filing this Application under Section 482 of the Code of Criminal Procedure, 1974 {"CrPC" for short}, the applicant-original accused seeks quashment of criminal complaint, being Criminal Case No. 1859 of 2010 filed by the respondent No. 2 herein against the applicant in the Court of learned JMFC, Viramgam, District Ahmedabad under Section 138 of the Negotiable Instruments Act, 1881 ["NI Act" for short]. 2. Heard learned advocate Mr. MIG Mansuri for the petitioner and learned APP Ms. Moxa Thakker for the respondent No. 3-State as well as learned advocate Mr. Dhaval M. Barot for the respondent No. 1 & 2. 3. Learned advocate Mr. MIG Mansuri appearing for the petitioner urged that two different notices were issued by the respondent No. 2. That the first cheque in question was deposited on 25th February 2010 by the respondent No. 2 with the Bank which was dishonoured and returned unpaid with a memo issued by the Bank on 3rd March 2010 because of insufficient funds. Thereafter, complainant issued first notice dated 5th March 2010 to the petitioner, which was received on 31st March 2010. When the accused failed to pay amount outstanding within fifteen days of the receipt of the notice, therefore, in view of provisions of Section 138 of the Negotiable Instruments Act, the cause of action has arisen on expiry of the said fifteen days, but, the complainant did not chose to file complaint within stipulated period of cause of action of the first notice, in view of provisions of Section 142[B] of the NI Act. He further urged that the complainant-respondent No. 2 issued again second notice dated 4th September 2010 with a story of re-deposit of the said cheque, which was received by the petitioner on 9th September 2010. According to the learned advocate, the second notice after re-presentation of the cheque cannot revive the cause of action, which was already due to afflux of time, and therefore, the impugned complaint based upon the second notice is required to be quashed and set-aside. In support of his contention, learned advocate Mr. Mansuri has relied upon decision of this Court in case of Pruthvish B. Dave v. State of Gujarat & Anr., reported in 2000 [1] GCD 114 and by the Apex Court in case of Sadanandan Bhadran v. Madhavan Sunil Kumar, reported in 1998 [6] SCC 514.
In support of his contention, learned advocate Mr. Mansuri has relied upon decision of this Court in case of Pruthvish B. Dave v. State of Gujarat & Anr., reported in 2000 [1] GCD 114 and by the Apex Court in case of Sadanandan Bhadran v. Madhavan Sunil Kumar, reported in 1998 [6] SCC 514. Thereafter, it is further urged that first verification was given by the respondent No. 2 before the learned Magistrate with respect to the impugned notice. In the verification, the complainant and the respondent No. 2 stated that he deposited the said cheque in his account maintained with Mandal Nagarik Sahakari Bank on 25th February 2010 and it was dishonoured and returned with an endorsement "Insufficient Funds" by the Banker by a memo dated 3rd March 2010 and for that, the complainant issued a notice dated 4th September 2010 which was received by the accused and even then the accused did not pay the said amount within stipulated time and thereby committed an offence under Section 138 of the NI Act. That the complainant has completely maintained silence in the said verification about issuance of first notice dated 25th March 2010 and its receipt by the petitioner on 31st March 2010. That, the learned Magistrate did not apply his mind properly to the facts of the case in light of provisions of Section 138 read with Section 142 of the NI Act and mechanically took cognizance of the offence on 30th October 2010 and ordered to admit the said complaint and to issue summons against the accused. Learned advocate has further submitted that on the given date, there was no legally enforceable debt or liability of the petitioner. That, the respondent No. 2 illegally possessed the blank cheque of the petitioner signed by him for it to present to the Banker of the respondent No. 2 for encashment of the amount. He committed breach of trust and have cheated the petitioner and tried to falsely implicate him by misusing the legal machinery and has abused the process of law. On this issue, learned advocate has placed reliance upon decision of this Court rendered in Criminal Misc. Application [For Quashing & Setting Aside FIR/Order] No. 968 of 2014 with Criminal Misc.
He committed breach of trust and have cheated the petitioner and tried to falsely implicate him by misusing the legal machinery and has abused the process of law. On this issue, learned advocate has placed reliance upon decision of this Court rendered in Criminal Misc. Application [For Quashing & Setting Aside FIR/Order] No. 968 of 2014 with Criminal Misc. Application No. 1067 of 2014 and allied cases dated 15th June 2016 and requested this Court to allow this petition by quashing and setting aside the impugned complaint, being Criminal Case No. 1859 of 2010 pending in the Court of learned JMFC, Viramgam, District-Ahmedabad. 4. On the otherside, learned advocate Mr. Dhaval M Barot appearing for the respondents No. 1 & 2 submitted that on issuance of second or successive notice, it is always permissible to the complainant to lodge a complaint under Section 138 of the NI Act. That, on both the occasions, notice was issued to the petitioner and it was never replied or responded to, nor any amount in question was paid to the complainant. According to learned advocate, there is no restriction to present the cheque again for encashment, when the cheque issued by the petitioner was presented before the Banker within a period of six months from the date on which it was drawn or even within the period of its validity. That on returning the cheque due to "insufficiency of funds" in the account, a demand for payment of the said amount of money was made by the complainant by giving a notice in writing to the petitioner i.e., the drawer of the cheque within a period of thirty days of the receipt of information from the Bank regarding return of the cheque as unpaid. That the petitioner failed to make payment of the said cheque of money to the complainant within fifteen days of the date of receipt of notice, and therefore, the petitioner has committed an offence under Section 138 of the NI Act. That, the complaint based on second or successive default in payment of the cheque amount would not be impermissible simply because no prosecution was based on first default, which is followed by a statutory notice. Further, notice issued by the complainant twice to the petitioner were never replied or responded by him. Learned advocate Mr.
That, the complaint based on second or successive default in payment of the cheque amount would not be impermissible simply because no prosecution was based on first default, which is followed by a statutory notice. Further, notice issued by the complainant twice to the petitioner were never replied or responded by him. Learned advocate Mr. Barot in support of his contentions relied upon the judgment rendered by the Apex Court in case of MSR Leathers v. S. Palaniappan & Anr., reported in (2013) 1 SCC 177 . 5. Having considered the facts of the case, submissions made by the learned advocates appearing for the respective sides, it appears that one Criminal Case No. 1859 of 2010 is filed by the respondent No. 2 against the present petitioner in the Court of learned JMFC, Viramgam, District Ahmedabad under Section 138 of the Negotiable Instruments Act, 1881. Before preferring complaint, a legal notice was issued by the respondent No. 2 herein upon petitioner through his advocate by registered AD/Speed Post/UPC on 25th March 2010 demanding an amount of Rs. 2,00,000/-, relying upon cheque issued by the petitioner bearing No. 794308 dated 25th February 2010 which was returned back with a memo from the Banker with an endorsement "insufficient funds". It also appears from the record that a second notice was issued by the respondent No. 2 on 4th September 2010 to the petitioner stating that cheque dated 25th February 2010, when was presented with Mandal Nagrik Sahakari Bank had returned back dishonoured by the Banker with an endorsement "insufficient funds" on 3rd March 2010, and thereafter, the complainant approached the petitioner in respect of presentation of the cheque and it was assured by the petitioner that he would manage for the funds in his account and he was requested to re-deposit the said cheque in question. Again on 11th August 2010, the cheque in question was re-deposited by the respondent No. 2 in his account, but it was returned once again with the same endorsement "insufficient funds" by the Banker concerned. The memo of the Bank alongwith dishonoured instrument was received by the complainant on 23rd August 2010. Further, a request was made by the complainant in the notice to the petitioner herein to manage for the funds and pay it to the complainant within fifteen days from the receipt of the notice.
The memo of the Bank alongwith dishonoured instrument was received by the complainant on 23rd August 2010. Further, a request was made by the complainant in the notice to the petitioner herein to manage for the funds and pay it to the complainant within fifteen days from the receipt of the notice. This notice was also received by the petitioner on 9th September 2010. But, the petitioner did not chose to reply to the same. Hence, a complaint was filed on 10th October 2010 before the Court of learned JMFC, at Viramgam, which was registered as Criminal Case No. 1859 of 2010. It also appears from the record that on the lodging of the complaint, verification of the complainant was recorded on 13th October 2010 before the Magistrate. The complainant has disclosed the fact of cheque being issued by the petitioner; deposit of the same in the Bank on 25th February 2010 and returning of the cheque with a memo of the Bank on 3rd March 2010 and notice issued on 4th September 2010. It is true that in the verification of the complainant, he has not disclosed with respect to the first notice by the complainant dated 25th February 2010, which was received by the petitioner on 31st March 2010. Relying upon the statement made by the complainant in his verification made by the Court that notice was issued on 4th September 2010 and it was received by the accused but he did not pay the amount of cheque, and therefore, learned Judge was pleased to issue summons to the accused by registering the complaint on criminal register by his order dated 13th October 2010. Now, the only question remains for consideration the Court is whether non-disclosure of issuance of first notice in the verification made before the Court by the complainant and on presenting the same cheque before the bank authority again and returning of the same by the bank authority with an endorsement of "insufficient funds" on afflux of time for lodging the complaint of returning of the cheque and issuance of first notice, whether the complaint is maintainable or not. In case of Pruthvish B. Dave v. State of Gujarat & Anr. [Supra], admittedly, the cheque was presented twice and on both the occasions, notices were served on the petitioner.
In case of Pruthvish B. Dave v. State of Gujarat & Anr. [Supra], admittedly, the cheque was presented twice and on both the occasions, notices were served on the petitioner. Assuming that the notice was served and received in time, on the first occasion, then the complaint would be time barred keeping in light the provisions of Section 138 read with Section 142(b) of the N.I Act. The second presentation of cheque or service of notice cannot revive the cause of action which has already expired due to afflux of time, in light of the provisions of Negotiable Instrument Act. 6. In another decision relied upon by learned advocate Mr. Mansuri appearing for the petitioner rendered in case of Sadanandan Bhadran v. Madhavan Sunil Kumar [Supra], a complaint was lodged under Section 138 read with Section 142 of the NI Act. As per the ratio laid down by the Apex Court, in the cited case, the cause of action to file complaint on non payment despite issuance of the notice arises only one time. Another cause of action would not arise on repeated dishonour of the cheque. It was further urged that payee is always free to present the cheque repeatedly within its validity period [i.e., six months] but once notice has been issued and payment not received within fifteen days of the receipt of the notice, payee has to avail the very cause of action arising thereupon and file a complaint. It is further held that dishonour of cheque on each re-presentation does not give rise to a fresh cause of action hence, a complaint under Section 142(b) of the NI Act has to be filed within one month from the date immediately following the day on which the period of 15 days from the date of receipt of the first notice by the drawer expires. 7. True that in the earlier occasion this was the legal position for filing the complaint on dishonour of the cheque that only once complaint can be filed, but later on, the Apex Court in MSR Leathers v. S. Palaniappan & Anr.
7. True that in the earlier occasion this was the legal position for filing the complaint on dishonour of the cheque that only once complaint can be filed, but later on, the Apex Court in MSR Leathers v. S. Palaniappan & Anr. [Supra] has taken a contrary view to the previous one, and it has held that, "a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default which was followed by a statutory notice and a failure to pay had not been launched. The prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the provision to Section 138 of the NI Act." 8. Section 142 of the Negotiable Instruments Act governs taking of cognizance of the offence and starts with a non-obstante clause. It provides that no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, by the holder in due course and such complaint is made within one month of the date on which the cause of action arises under clause [c] of the proviso to Section 138. In terms of sub-section [c] to Section 142, no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class is competent to try any offence punishable under section 138. What is important is that neither section 138, nor section 142 or any other provision contained in the NI Act forbids the holder or payee of the cheque from presenting the cheque for encashment on any number of occasions within a period of six months of its issue [at the relevant time] or within the period of its validity; whichever is earlier. That such presentation will be perfectly legal and justified was not disputed by the learned advocates appearing for the parties. Suffice it to say that there was nothing in the provisions of the Act that forbids the holder or payee of the cheque to demand by service of a fresh notice under clause (b) of proviso to Section 138 of the NI Act, the amount covered by the cheque, should there be a second or a successive dishonour of the cheque on its presentation.
There is nothing either in Section 138 or Section 142 which curtails the said right of the payee, leave alone a forfeiture of the said right for no better reason than the failure of the holder of the cheque to institute prosecution against the drawer when the cause of action to do so had first arisen. Simply because the prosecution for an offence under section 138 must on the language of section 142 be instituted within one month from the date of the failure of the drawer to make the payment does not in our view mitigate against the accrual of multiple causes of action to the holder of the cheque upon failure of the drawer to make the payment of the cheque amount. Thus, it is difficult to hold that the payee would lose his right to institute such proceedings on a subsequent default that satisfies all the three requirements of Section 138 of the NI Act. Therefore, when the Apex Court, applying the above rule of interpretation and the provisions of Section 138 of NI Act held that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default, which was followed by a statutory notice and a failure to pay had not been launched. 9. Under section 200 CrPC, a Magistrate can take cognizance of an offence on complaint given in writing and examine upon oath, the complainant and the witnesses present; if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses and also by the learned Magistrate. Here also, on a statement of the complainant made before the learned Magistrate, it appears that cognizance was taken by the learned JMFC, Viramgam on 13th October 2010, issuing summons and registering the complaint under Section 138 CrPC. 10. The issue raised by the learned advocate Mr. MIG Mansuri that the cheque in dispute was never signed by the petitioner and it was possessed by the respondent having no signature of the petitioner as it was a blank cheque, and therefore, the complaint itself is not maintainable in the eyes of law.
10. The issue raised by the learned advocate Mr. MIG Mansuri that the cheque in dispute was never signed by the petitioner and it was possessed by the respondent having no signature of the petitioner as it was a blank cheque, and therefore, the complaint itself is not maintainable in the eyes of law. Raising dispute of blank cheque without signature of the petitioner, allegedly in the possession of both the respondents is a question of fact which requires evidence before the trial Court. At this juncture, this Court cannot come to the conclusion that the cheque in question was not signed by the petitioner and was illegally within the possession of both the respondents. On this issue, learned advocate Mr. Mansuri has placed reliance upon decision of this Court rendered in Criminal Misc. Application No. 968 of 2014 and allied cases wherein it was evident from the facts that the cheque in dispute was issued by the Managing Director & Vice President of the Company was a blank signed cheque in favour of the complainant-firm as security. Ultimately, the complainant thought fit to fill up the blank signed cheque which was drawn by the M.D on behalf of the Company as security. These facts are revealed from para 2.4 to 2.7 of the said decision. Here, this is not a position, as argued by the learned advocate for the petitioner that disputed cheque was a blank signed cheque and was illegally in possession of the respondents or misused by them. The question requires consideration by recording evidence of the parties, and therefore, judgment relied upon by learned advocate Mr. Mansuri would not be applicable at this stage. Hence, on all counts, petition requires to be rejected, holding that prosecution can be based upon second or successive dishonour of the cheque, which is also permissible so long as it satisfies the requirements stipulated under the provisions of Section 138 of the Negotiable Instruments Act. 11. Resultantly, Criminal Misc. Application fails and the same is rejected. Rule discharged with no order as to costs.